NIO Stock Price and News: NIO cruises higher as electric vehicle sector bounces back

NIO Stock Price and News: NIO cruises higher as electric vehicle sector bounces back

NYSE:NIO adds another 2% to Monday’s rally in early trading.

Chinese stocks continue to see inflows after recent heavy selling.

NIO targets $40 and a break above short term moving averages.

Update: NIO continued to recover on Tuesday after a turbulent week last week. NIO stock added over 3% on Monday and so far in early trading on Tuesday the electric car maker is up just about 2% in early trading. $40.61 is the resistance to aim for as this is the gap from last week’s drop on the chart. NIO needs to break $47 though to turn bullish on the charts.

NYSE:NIO rebounded to start the week as investors shrugged off the recent driver-assist system fatality that caused the stock to tumble last week. Other good news had China stocks rallying, including the first day since July in which no new cases of COVID-19 were reported in the country. Shares of NIO gained 3.39% to close the trading session at $38.17. The markets rebounded to start the week as the NASDAQ and S&P 500 hit new all-time highs on the strength of tech sectors, particularly chip makers like AMD (NASDAQ:AMD) and NVIDIA (NASDAQ:NVDA).

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Speaking of chip makers, it is believed that worsening COVID-19 cases in South East Asian countries like Malaysia, could cause the ongoing chip shortage to worsen over the near term. This shortage has already affected companies like Nio, which cited the shortage in chips for falling production numbers in the second half of this year. Other companies like Ford (NYSE:F) have also had to delay releases of new electric vehicle models, and unfortunately it looks like this shortage is going to continue into 2022.

NIO stock forecast

In Stateside news, General Motors (NYSE:GM) fell on Monday and lagged the broader electric vehicle sector. The sell off was due to the company recalling its Chevrolet Bolt vehicles over concerns that the battery may catch fire. This recall includes all models of the Bolt including the newer ones from 2021 and is expected to cost General Motors upwards of $1 billion USD. The recall is a black eye for all electric vehicles, but investors only seemed to want to punish shares of GM on Monday.

Top Wall Street analysts say these stocks are long-term buys

Shoppers walk in front of a Walmart store in San Leandro, California, U.S., on Thursday, May 13, 2021. David Paul Morris | Bloomberg | Getty Images

As earnings season draws to a finale, investors' eyes are focused on how the second half of 2021 will look. Be it a contagious new Covid-19 variant causing lockdowns, shifting e-commerce trends changing consumer behavior, or vacation seasonality determining the fate of the travel industry, the factors affecting our financial future are unpredictable. To gain an edge, many investors take into consideration the ratings put forth by the top performing financial analysts. TipRanks makes this possible for the everyday investor by organizing these updated ratings into an easy-to-read format. Some of the companies featured in this article fell short of analysts' estimates with poor earnings performances over the second quarter at times due to difficult comparisons against their incredibly strong first-quarter results. Others, however, pulled through and reported uplifting developments. These now remain as, or have been newly assigned, buy ratings. Wall Street’s best-performing analysts assigned these ratings due to the companies' potential for long-term upside. Let’s take a look at five stocks that top analysts see as long-term buys.

Walmart

Positioned particularly well to handle the deceleration in e-commerce trends, Walmart recently reported quality earnings results. After Walmart beat Wall Street consensus estimates and raised its own guidance, Peter Benedict of Robert W. Baird & Co. increased his price target from $160 to $170, and maintained his buy rating on the stock. The five-star analyst was pleased by Walmart’s diversifying revenue streams, notably the acceleration in initiatives like Walmart Connect. He also noted that gains had been made across the grocery and general merchandise sectors. Walmart beat Wall Street’s $1.51 earnings per share estimates, reporting $1.78. Furthermore, the retailer increased its international sales by 13%, and reached an all-time high in Sam’s Club memberships. The back-to-school shopping season brings encouragement to Benedict, who stated that Walmart is “well-positioned regardless of the macro environment,” for the second half of the year. Stimulus payments certainly aided Walmart’s past earnings, and now the analyst argues that the business is continuing to accelerate forward. TipRanks' unique data has placed Benedict as #34 out of over 7,000 analysts. He has a success rate of 81%, and an average return of 24.3% per rating.

Airbnb

As vaccination drives picked up steam in the first half of the year, so did the travel industry. Despite the company’s particularly precarious position at the start of the pandemic, Airbnb was able to navigate the rough seas and is now sailing smoothly. After another second-quarter earnings beat, Brian Fitzgerald of Wells Fargo has forecasted a strong second half ahead. Fitzgerald rated the stock a buy and raised his $200 price target per share to $210. The five-star analyst based his hypothesis on the fact that while long-term nonurban bookings have been the strongest niche for the company, it is now seeing shorter, more urban bookings rise. This comes on the heels of economies opening up throughout the summer, along with the typical vacation season getting underway.

However, he expects the more flexible travel trends to stick around, as consumers retain their increasingly hybrid work schedules. Airbnb has a vast portfolio of domestic and international property options, and as such, Fitzgerald believes the company is in an especially advantageous position to capture this trending market. Despite Covid-19, things have been going well for the company. Its Nights and Experiences initiative expanded 197% year-over-year, and it saw gross booking value move 320% upward over that same period. Airbnb has been helping its supply and demand curve by attracting more hosts, after many had opted for renting their properties long-term to locals. It has introduced better optimized onboarding strategies for new hosts, cutting the onboarding time by greater than 50%. Fitzgerald remains optimistic for the third quarter, arguing that the guidance provided by ABNB is “conservative.” However, he does caution that the “spread of Covid variants, local travel restrictions and slowing vaccinations are beginning to adversely impact cancellations.” On TipRanks, Fitzgerald is ranked #36 out of over 7,000 total analysts. He has a success rate of 70%, averaging a return of 32.9% per rating.

Advanced Micro Devices

The shortage in semiconductors during the first half of 2021 caused several industries to spiral, notably automotive producers and computer manufacturers. Now, with the supply of silicon chips slowly creeping back up to meet the high demand, it is important to find the best firm in which to invest. Vivek Arya of Bank of America believes one of those to be Advanced Micro Devices. He asserts that even with the recent run-up in price, the stock is still trading at about 25% less than what it’s worth. Calling it a “top catch-up candidate,” Arya rated the stock a buy, and declared a price target of $135. Not only did AMD recently beat earnings per share expectations by more than 20%, but the company is currently trading at a discount, in relation to its industry competitors. Arya said that the company is poised to grow its gross margins by more than almost any other semiconductor producer. In contrast to Intel, AMD has “limited exposure to more cyclical smartphone, memory, [and] autos/industrial demand.” Intel is still dealing with losses from Apple’s decision to produce its processors in-house, and its pipeline is possibly a generation behind AMD’s roadmap. On TipRanks, Arya is rated as #71 out of more than 7,000 total analysts. He has a success rate of 69%, while averaging returns of 27.4% per rating.

Even a less-than-stellar second-quarter earnings print can result in a buying opportunity. For example, if a stock falls precipitously, but the investor sees it as an overreaction, a buying opportunity presents itself. This is precisely the thought process of Brad Erickson of RBC Capital Markets, who wrote that the trends that negatively affected Wix.com “appear transitory,” and that the company itself is still a leader in web design. Erickson reiterated his buy rating on the stock, and assigned a revised price target of $270. While this target comes in lower than his previous at $315, it still could represent a sizeable upside for anyone willing to make the trade. The five-star analyst hypothesizes that Wix’s B2B partnerships provide more upside than not, as they have the potential to transform into recurring opportunities for monetization. He interpreted management’s comments as meaning that the deals themselves also may “organically evolve as much as 4x the minimum commitments depending on conversion.” While Wix does provide services to individual web developers, its larger, more institutional e-commerce customers provide significantly more revenue to the company. Finally, Erickson wrote that he sees Wix’s “increased pursuit of agency channels and the e-commerce opportunity as additional potential upside given the attractive size and recurring nature of these revenue streams.” In other words, as long as e-commerce trends continue to grind upwards, Wix stands to benefit. On TipRanks, Erickson is rated as #184 out of over 7,000 analysts. He has a success rate of 58%, and averages a return of 38.1% per rating.

Nio

Why Nio Stock Is Down Today

What happened

Shares of Chinese electric vehicle maker Nio (NYSE:NIO) were trading lower on Thursday, under pressure amid a sell-off of luxury goods makers on concerns that China may take new actions to limit personal income and redistribute wealth.

As of 10:45 a.m. EDT, Nio’s American depositary shares were down about 4.2% from Wednesday’s closing price.

So what

Hermès International, LVMH Moët Hennessy, Gucci owner Kering, and Ferrari were among the big luxury names trading sharply lower on Thursday, after China’s government signaled that a crackdown on income inequality is coming.

The goal was announced in a readout from an economic planning meeting attended by China’s president, Xi Jinping, on Tuesday that was reported in Chinese state media on Thursday. It follows a series of steps by the government to rein in some of the country’s fastest-growing online businesses, including ride-hailing giant DiDi Global, as part of Xi’s broader campaign to reduce poverty in the world’s most populous nation.

What does that have to do with Nio? While it isn’t playing in the same lofty market segments as Hermès or Ferrari, its products are priced and positioned as upscale vehicles and direct rivals to Tesla. If Chinese consumers are urged to avoid status symbol purchases, demand for the sleek high-tech vehicles built by Nio (and Tesla) could well soften.

Right now, that’s just a possibility. But it’s a possibility that was almost certainly contributing to Nio’s share price decline on Thursday.

Now what

Electric vehicle investors have been relieved to see that Nio, as a high-tech industrial company, hasn’t had to face the kinds of consequences doled out by China’s government against DiDi and others. But restrictions on income and consumer spending could crimp the company’s growth – particularly if consumers feel the need to stick with simpler vehicles for a while.